- Tether started blacklisting addresses in November 2017.
- This revelation has added to the distrust of central organizations in the crypto space.
- CENTRE, the issuer of USDC also blacklisted an address citing compliance.
Tether, a renowned stablecoin issuer has blacklisted 39 Ethereum addresses holding £36.55 million in Tether (USDT). A report unveiled this news on July 9, noting that the firm banned 24 of the accounts in this year. Per the publication, the 24 accounts held more than £4.38 million worth of USDT, and the largest held £3.62 million in USDT. Reportedly, Tether started banning these addresses on 17 November 2017.
Reportedly, this news came into light after Philippe Castonguay, an Ethereum researcher at Horizon used Dune Analytics to create a dashboard that tracks blacklisted addresses. Through debarring the addresses, Tether has rendered the USDT they hold unusable.
Commenting on this move, Stuart Hoegner, general counsel at Bitfinex, Tether’s sister firm said,
“Tether routinely assists law enforcement in their investigations… Through the freeze address feature, Tether has been able to help users and exchanges to save and recover tens of millions of dollars stolen from them by hackers.”
Centralization in the crypto space
Speaking about the blacklisted address, Eric Wall, Arcane Assets’ CIO tweeted that the most recent ban was on address 0x8a160cac2f51f0365f92114837ee1cc8c5f9acb7 on June 14 this year. In his tweet, he unveiled that Binance had sent £744,710 worth of USDT to the address in question. Wall added that Tether blacklisted the address 22 hours after receiving the funds.
Wall went on to note that,
“Most other freezes seem to have been made on Ethereum accounts either for precautionary reasons (possibly identified as scams/ponzis) or in error/to protect others from making errors (like freezing 0x000…0001). 3 addresses were unfrozen after the freeze.”
While blacklisting addresses used fraudulently might help improve security in the crypto space, this action has reportedly increased the distrust of central organizations in the crypto sector. For instance, one crypto adopter responded to Castonguay’s tweet, saying that the only censorship-resistant stablecoins are DAI and sUSD.
Increasing censorship in the crypto-verse
This revelation comes after a report revealed that the issuers of USDC, CENTRE had blacklisted an address holding 100,000 USDC. Explaining why the firm banned the address, a Circle representative speaking on behalf of CENTRE said that the firm blacklisted the account following a request from law enforcement. The spokesperson declined to comment on the specifics of the request, adding that CENTRE complies with binding court orders that have appropriate jurisdiction over it.